More adversity for Ireland

January 12, 2014 - Harry Eagar

In the New York Times, a devastating look at how austerity failed in Ireland

Fintan O'Toole uses both observation . . .:

"There’s always been a simple way to measure how well Ireland is doing: Go to the ports and airports after the Christmas vacation and count the young people waving goodbye to their parents as they head off to the United States, Canada, Australia or Britain, where they have gone to find work and opportunity.

"Other people protest in bad times; the Irish leave. And they’ve been doing so in numbers that haven’t been recorded since the 1980s. Nearly 90,000 people emigrated between April 2012 and April 2013 and close to 400,000 have left since the 2008 crisis. For a country with a population about the size of Kentucky’s (about 4.5 million), that’s a lot of people."

. . . and numbers:

This is why, in the end, the austerity program has not succeeded even in its basic aim of bringing down Ireland’s sovereign debt, which actually rose sharply over the last five years. In 2009, it was 64 percent of G.D.P. Last year, it peaked at 125 percent. The debt has doubled while public spending has been slashed."

No kiddin'.

O'Toole happens to live in an advanced, culturally familiar country, where the disasters of finance capitalism and policies that give credence only to money, not people, is more easily comprehended. But Joseph Stiglitz, based on his experience as top economist at the World Bank and the International Monetary Fund, was saying the same thing about what finance capitalism was doing to distant, poorer, more exotic and obscure Third World countries long before the Panic of '08 brought the lesson home to the places where the modern exploitation of labor was refined.

There actually is a counterexample of how to deal with a failure of markets by giving due weight to the contributions of both capital and labor, and it's right here at home. It is also a source of endless grievance-theater from the money-worshipping American rightwing. It's the American auto industry.

When endlessly incompetent management finally left the Big 3 unable to pay their bills, the government stepped in. Instead of paying off the bondholders first, second and last; it gave due weight to the contributions of labor and diverted some of the assets to workers. It was not fair (the workers were shortchanged) but it was sensible, and it had the obvious knock-on attraction of not destroying the lives of auto pensioners and workers and pensioners in allied segments of the economy.

The rightwingers are still whinging and demanding the head of Obama for not giving them their pound of flesh, but the outcome was rather good. Incompetent management was replaced (at too high a cost) with at least slightly competent management; hundreds of thousands, if not millions of working families were saved from financial disaster; and the sector is expanding again.

The scorched earth tactic of the free-market tub thumpers, on the other hand, leaves behind only scorched earth.